Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Share buyback definition

What does Share buyback mean? A share buyback is a company purchasing its own issued shares, typically to return surplus cash, manage capital structure or satisfy employee share schemes. The statutory concept in UK company law is a “purchase of own shares”; “share buyback” is the common transactional term. In England & Wales, Scotland and Northern Ireland, buybacks by a limited company are governed by Part 18 of the Companies Act 2006. Key features include: shareholder authority (ordinary resolution for market purchases; special resolution approving the contract for off‑market purchases); funding only from distributable profits or the proceeds of a fresh issue (with...

UK company share buybacks: statutory, regulatory and institutional investor guidelines for private, listed and AIM companies, including CA 2006, UKLRs, DTRs, UK MAR and the Takeover Code

Published by a LexisNexis Corporate expert

Practice notes

A limited company may repurchase its own Shares, provided the conditions in the Companies Act 2006 (CA 2006) are met. This is often termed a Share Buyback or a purchase of own shares. Besides the CA 2006 provisions, further Rules apply when a listed company or an AIM company intends to purchase its own shares. Specifically, a listed company must have regard to the UK Listing Rules (UKLRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must consider the AIM Rules for Companies (AIM Rules), although these do not explicitly address buybacks; AIM Regulation has confirmed that, in most situations, adherence by an AIM company to the UKLRs for buybacks would be regarded as best practice. An AIM company is also subject to DTR 5. In addition, both categories of company may follow institutional investor guidance. The CA 2006 restrictions on share buybacks do not apply to unlimited companies. For more detail on this company type, see Practice Note: Unlimited companies...

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Web page updated on 27/05/2026

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